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Weekly Update Volume 40, Issue 33

11/22/2010

LITIGATION

OIL AND GAS LEASES, DECOMMISSIONING COSTS:

The Fifth Circuit held that a "farmout agreement," under which the owner of a federal offshore oil and gas lease transferred its rights to drill to another drilling operator, does not require the operator to bear a proportionate share of the costs of decommissioning an oil platform at the lease site. The lease owner's construction of the term "platform costs"—that it includes "all costs attributable to the platform from cradle to grave, construction to dismantlement"—is unsupported by the agreement. The term includes only fixed, startup costs of constructing a well, not speculative operational expenses.Apache Corp. v. W&T Offshore, Inc., No. 09-31122, 41 ELR 20020 (5th Cir. Nov. 16, 2010).

EMERGENCY RESPONSE, AMERICANS WITH DISABILITIES ACT:

The Eighth Circuit upheld the dismissal of individuals' claims that a county violated the Americans With Disabilities Act, the Rehabilitation Act, and the Minnesota Human Rights Act in failing to provide American Sign Language interpreters for all of the services provided to the public in evacuating an area contaminated with mercury. The lower court properly granted the county's motion for summary judgment. The plaintiffs received effective communication, and therefore meaningful access to the programs and services offered, during the emergency decontamination process. While there is little doubt that the plaintiffs had need of interpreters when the emergency decontamination services began, they failed to prove that the county was responsible for interpreters not being present. Moreover, the response team's means of communication during the decontamination process provided plaintiffs with timely, meaningful access to the emergency services. Likewise, the plaintiffs received effective communication during the public group meetings between victims and representatives of various government agencies, where interpreters were present. And while interpreters were not present at every private meeting they had with a county nurse, information to which they claimed they were denied access--questions concerning long-term effects of being exposed to mercury--was not the nurse's area of expertise and there is no evidence that plaintiffs were unable to obtain that information from other sources.Loye v. County of Dakota, No. 09-3277, 41 ELR 20019 (8th Cir. Nov. 17, 2010).

INSURANCE, POLLUTION EXCLUSION:

The Fifth Circuit held that a pollution exclusion clause contained in an oil well operator's insurance policy bars coverage for cleanup costs of an oil leak on leased land. The operator argued that the exclusion did not apply because the operator leased only mineral rights and that the surface rights to the subject property were not owned, leased, or otherwise in the operator's possession. But the unambiguous language of the policy excludes coverage for "the soil, minerals, water or any other substance on, in or under such owned, leased, rented or occupied property." Because the damage occurred on the physical property that the operator leased, the exclusion applies.Aspen Insurance UK Ltd. v. Dune Energy, Inc., No. 10-30335, 41 ELR 20021 (5th Cir. Nov. 8, 2010).

INSURANCE, POLLUTION EXCLUSION:

A district court held that an insurer has no duty to defend or indemnify a leather tanning company in underlying lawsuits brought by farmers who used sludge from the company's tanning activities as fertilizer. The sludge, which the company applied on the farms free of charge to avoid landfilling fees, was contaminated with hexavalent chromium, a toxic chemical. The company argued that the policy's pollution exclusion clause did not apply because it prepared and used the byproduct as a fertilizer. But under Maine law, the pollution exclusion applies because the discharge was done in the course of a business traditionally associated with environmental pollution--the spreading of fertilizer. The exclusion also applies under Missouri law since it excludes coverage for damage arising from exposure to toxic substances. In the alternative, the company argued that the policy's sudden and accidental exception applied. But the spreading of fertilizer was neither sudden nor accidental.Prime Tanning Co. v. Liberty Mutual Insurance Co., No. CV-09-359-B, 41 ELR 20023 (D. Me. Nov. 10, 2010) (Woodcock Jr., J.).

INSURANCE, REMEDIATION ORDERS:

A Wisconsin appellate court held that an insurer has no duty to indemnify a manufacturing company for costs it incurred cleaning up private landowners' property that was part of a larger environmental remediation effort required by the government. The parties previously stipulated that the insurer would not provide coverage for the cost of government required remediation. The company argued that it was responding to private party claims and that the private party claims for remediation simply overlap with the governmental requirement. But the company has not paid any private party any compensation for contamination to property, and it has not established that it was responding to a demand for compensatory, monetary relief from a nongovernment third-party.Brunswick Corp. v. Sentry Insurance, No. 2010AP365, 41 ELR 20022 (Wis. Ct. App. Nov. 10, 2010).

STATUTE OF REPOSE, LATENT DISEASES:

A district court held that North Carolina's general 10-year statute of repose does not bar a woman's lawsuit against the United States for injuries stemming from exposure to contaminated drinking water at a military base in North Carolina 20 years earlier. The North Carolina Legislative did not intend the 10-year statute of repose to refer to latent diseases. Thus, the statute cannot bar her claim involving Non-Hodgkin's lymphoma, a latent disease that only manifested in November 2003.Jones v. United States, No. 7:09-CV-106, 41 ELR 20024 (E.D.N.C. Nov. 10, 2010) (Boyle, J.).

EPA announced the availability of a guidance document,PSD and Title V Permitting Guidance for Greenhouse Gases, for public comment.75 FR 70254(11/17/10).

EPA granted the California Air Resources Board's request for a waiver of CAA preemption for emission standards and test procedures for the 2004, 2005-2007, and 2008 model year regulations.75 FR 70237(11/17/10).

EPA announced that a proposed natural gas-fired power plant at the Encino Power Station in Carlsbad, California, is not subject to the PSD permit program.75 FR 70916(11/19/10).

EPA entered into a proposed administrative agreement under CERCLA that requires the settling party to pay $220,380 in U.S. response costs incurred at the 76th & Albany Superfund site in Chicago, Illinois.75 FR 70001(11/16/10).

The president proclaimed November 15, 2010, as America Recycles Day 2010 to celebrate the individuals, communities, local governments, and businesses that work together to recycle waste and develop innovative ways to manage our resources more sustainably.75 FR 71003(11/19/10).

WATER:

EPA proposed to approve revisions to Colorado's public water system supervision primacy program, except for Indian country.75 69662(11/15/10).

WILDLIFE:

NOAA-Fisheries proposed distinct population segment status for the Hawaiian insular false killer whale and proposed to list the species as endangered under the ESA.75 FR 70169(11/17/10).

United States v. HPI Products, Inc., No. 08-06133 (W.D. Mo. Nov. 15, 2010). Settling RCRA defendants that generate, store, and transport hazardous waste at six facilities in St. Joseph, Missouri, must pay a $75,000 civil penalty to both the United States and the state and must investigate and clean up any contamination at the six facilities; an individual defendant must sell his collection of classic cars, boats, and parts and turn over 90% of the proceeds to the United States and Missouri as a further civil penalty.75 FR 70947(11/19/10).

In re Asarco, LLC, No. 05-21207 (Bankr. S.D. Tex. Nov. 10, 2010). A settling CERCLA defendant must pay $2,400,000 to settle a late supplemental proof of claim relating to the Blue Ledge Mine Site located in Siskiyou County, California, which lies three miles south of the Oregon border.75 FR 70686(11/18/10).

United States v. City of Indianapolis, No. 1:06-cv-1456 (S.D. Ind. Nov. 8, 2010). Under an amended December 2006 consent decree, a settling CWA defendant responsible for violations from its municipal wastewater and sewer system must modify the control measures used for its combined sewer overflows.75 FR 69704(11/15/10).

H.R. 714 (federal land), which authorizes the Secretary of the Interior to lease certain lands in Virgin Islands National Park, was signed into law on October 8, 2010. Pub. L. No. 111-261, 15 Cong. Rec. D1087 (daily ed. Nov. 15, 2010).

Chamber Action

S. 1421 (carp), which would amend section §42 of title 18, U.S Code, to prohibit the importation and shipment of certain species of carp, was passed by the Senate. 156 Cong. Rec. S7992 (daily ed. Nov. 17, 2010).

H.R. 6278 (federal land), which would amend the National Children's Island Act of 1995 to expand allowable uses for Kingman and Heritage Islands by the District of Columbia, was passed by the House. 156 Cong. Rec. H7464-65 (daily ed. Nov. 16, 2010).

S. 1183 (deforestation)was reported by the Committee on Foreign Relations. S. Rep. No. 111-352, 156 Cong. Rec. S8062 (daily ed. Nov. 18). The bill would authorize the Secretary of Agriculture to provide assistance to the government of Haiti to end within 5 years the deforestation in Haiti and restore within 30 years the extent of tropical forest cover in existence in Haiti in 1990.

H.R. 5866 (nuclear energy)was reported by the Committee on Science and Technology. H. Rep. No. 111-658, 156 Cong. Rec. H7613 (daily ed. Nov. 18, 2010). The bill would amend the Energy Policy Act of 2005 requiring the Secretary of Energy to carry out initiatives to advance innovation in nuclear energy technologies, to make nuclear energy systems more competitive, and to increase efficiency and safety of civilian nuclear power.

Bills Introduced

S. 3943 (Gillibrand, D-N.Y.) (water pollution)would amend the Federal Water Pollution Control Act to direct the Administrator of EPA to carry out activities for the restoration, conservation, and management of Onondaga Lake, New York. 156 Cong. Rec. S7899 (daily ed. Nov. 15, 2010). The bill was referred to the Committee on Environment and Public Works.

S. 3947 (Cochran, R-Miss.) (federal land)would direct the Secretary of the Interior to convey to the state of Mississippi two parcels of surplus land within the boundary of the Natchez Trace Parkway. 156 Cong. Rec. S3974 (daily ed. Nov. 17, 2010). The bill was referred to the Committee on Energy and Natural Resources.

S. 3964 (Casey, D-Pa.) (oil spills)would provide for an expedited response to emergencies related to oil or gas production or storage. 156 Cong. Rec. S8062 (daily ed. Nov. 18, 2010). The bill was referred to the Committee on Health, Education, Labor, and Pensions.

S. 3970 (Menendez, D-N.J.) (municipal sustainability)would establish a program under which the EPA Administrator shall provide grants to eligible state consortia to establish and carry out municipal sustainability certification programs. 156 Cong. Rec. S8062 (daily ed. Nov. 18, 2010). The bill was referred to the Committee on Environment and Public Works.

H.R. 6434 (Castor, D-Fla.) (Deepwater Horizon)would establish programs to aid in the economic, environmental, and public health recovery of the Gulf States from the damage and harm caused by the blowout of the mobile offshore drilling unit Deepwater Horizon and the resulting degradation of the Gulf over time. 156 Cong. Rec. H7614 (daily ed. Nov. 18, 2010). The bill was referred to the Committee on Natural Resources

Note: The entries below cover state developments since the last issue of Update. The entries are arranged by state, and within each section, entries are further subdivided by subject matter area. To access material previously reported in 2010, visit our list ofCumulative State Developments. For state material reported prior to 2010, visit theELR Archives.

The Office of Environmental Health Hazard Assessment amended its list of chemicals known to the state to cause reproductive toxicity to include methyl isocyanate. The agency also delisted a number of chemicals from its list of substances known to cause cancer. The listing changes took effect November 12, 2010.Seehttp://www.oal.ca.gov/res/docs/pdf/notice/46z-2010.pdf(pp. 1902-20).

ILLINOIS

Hazardous & Solid Waste:

The Pollution Control Board amended 35 Ill. Adm. Code 739, Standards for the Management of Used Oil; 35 Ill. Adm. Code 808, Special Waste Classifications; and 35 Ill. Adm. Code 809, Nonhazardous Special Waste Hauling and the Uniform Program. Changes exempt used oil from the special waste manifest requirements and amend used oil tracking provisions.Seehttp://www.cyberdriveillinois.com/departments/index/register/register_volume34_issue46.pdf(pp. 17381-411).

IOWA

Climate:

The Environmental Protection Commission amended Iowa Admin. Code ch. 22, Controlling Pollution, and ch. 33, Special Regulations and Construction Permit Requirements for Major Stationary Sources—Prevention of Significant Deterioration of Air Quality. The changes adopt EPA's tailoring rule to ensure that greenhouse gases in Iowa are regulated in the same manner as in federal regulations. The amendments take effect December 22, 2010. Seehttp://www.legis.state.ia.us/aspx/ACODOCS/DOCS/11-17-2010.Bulletin.pdf(pp. 773-78).

The Department of Environmental Services proposed to adopt Env-Dw 714, Control of Lead and Copper. The rule establishes action levels for lead and copper in drinking water and describe the requirements for sampling and monitoring corrosion control treatment. The deadline for comments is December 17, 2010.Seehttp://www.gencourt.state.nh.us/rules/register/2010/november-12-10.pdf(pp. 5-6).

The State Environmental Commission proposed changes to Nev. Admin. Code § 445A, which governs public water systems. Changes establish guidelines for developing an intended use plan and revise provisions relating to financial assistance for the construction of wastewater treatment works and pollution control projects.Seehttp://www.leg.state.nv.us/register/2010Register/R115-10P.pdf.

NORTH CAROLINA

Water:

The Department of Environment and Natural Resources intends to adopt the rules cited as 15A N. C. Admin. Code 02H.0150-02H.0154 and 02H.1014-02H.1017 and to amend the rules cited as 15A N. C. Admin. Code 02H.0126, 02H.1002, and 02H.1005. Rules relate to stormwater discharge permits. Comments are due by January 14, 2011.Seehttp://www.ncoah.com/rules/register/Volume25Issue10November152010.pdf(pp. 1169-95).

OKLAHOMA

Water:

The Water Resources Board proposed to amend Okla. Admin. Code §785:45.5.3, Oklahoma's Water Quality Standards. Changes would modify procedures for listing and reporting beneficial use. There will be a public hearing on January 11, 2011, and the last day for written comments is January 10.Seehttp://www.oar.state.ok.us/register/Volume-28_Issue-05.htm#a22314.

The Water Resources Board proposed to amend Okla. Admin. Code §785:50.3, Financial Assistance. Among other changes, the amendments would alter language regarding "urban storm water activities" to "storm water" and "Brownfield activities," and would add a definition of "consultant." See http://www.oar.state.ok.us/register/Volume-28_Issue-05.htm#a23811.

PENNSYLVANIA

Air:

The Environmental Quality Board amended Pa. Code Ch. 123, Standards for Contaminants-Mercury Emissions. The change rescinds the ''state-specific'' requirements to reduce mercury emissions from coal-fired electric generating units with a nameplate rated capacity of more than 25 megawatts that produce electricity for sale. The rule took effect November 13, 2010.Seehttp://www.pabulletin.com/secure/data/vol40/40-46/2137.html.

The Department of Environmental Conservation seeks public comment on draft regulations related to environmental ticketing. The rule would allow the Department to issue Vermont Civil Violation Citations for violations of Vermont’s environmental laws, rules, regulations and permits, with fines up to $3,000. The measure is a new compliance tool but does not expand the Department's jurisdiction. Comments are due by November 26, 2010.Seehttp://www.anr.state.vt.us/dec/CO/enf/pdf/11-12-1_ticketing%20Rule_pre-filing_comments_%28gsk%29.pdf.

WASHINGTON

Toxic Substances:

The Department of Ecology proposed amendments to Wash. Admin. Code Chapter 173-334, Children's Safe Products-Reporting Rule. The rule would require manufacturers of children's products to report the presence of chemicals of high concern to children to the department. There will be a public hearing on December 9, 2010, and the comment period ends December 31, 2010. The intended date of adoption is March 15, 2011.Seehttp://apps.leg.wa.gov/documents/laws/wsr/2010/22/10-22-017.htm.

CHINA, EU REFUSE TO CHANGE CLIMATE POLICIES WITHOUT COMMITMENT FROM OTHER NATIONS

China and the European Union both stated last week that they would not harden rules on greenhouse gas emissions without action from other nations.Huang Huikang, a Chinese representative for climate change talks, announced on Friday that China will not agree to a dealtying climate change aid from rich nationsto its agreement to firmer international checks on its own greenhouse gas emissions. Huikang said the country would not yield on what he said was its right to make economic growth an overriding priority, and that the success of climate negotiations depended on advanced economies enacting big cuts and giving more aid to developing countries, not tighter monitoring of developing nations. "Previously," he said, "we haven't so strongly stressed that as a matter of principle we believe that improving transparency is not an issue." The European Union's chief negotiatorArtur Runge-Metzgerannounced Thursday that the EU will not harden current emissions pledges into a binding U.N. decision unless the United States and China do as well. He added that developing countries should "firm up" their targets if they wanted the EU to do the same. Meanwhile, according to Reuters, Japan is unlikely to legislate on its pledged plan to cut emissions by 25 percent from 1990 levels by 2020 before the climate talks in Cancun next month; however, subsequent legislation may include a new fossil fuel tax. For China and "emissions transparency," seehttp://www.reuters.com/article/idUSTRE6AI10K20101119.For the EU's announcement, seehttp://www.reuters.com/article/idUSTRE6AH4E520101118. For Japan, seehttp://www.reuters.com/article/idUSTRE6AI1CL20101119.

The Secretary of State for international development announced last week that the UK government will launch two new funds to expand renewable energy in Africa and Asia. The funds will mix private and public investment, and the government estimates that it could raise £9 of investment from industry for every £1 of taxpayer money. The funds are expected to come from the £2.9 billion already set aside in the aid budget to tackle climate change over the next four years. In Africa, the money would go to buy renewable energy at a guaranteed price to stimulate investment in projects. The fund is not designed for direct investment into projects, but instead will funnel money into grants through private equity funds to create a market for investment in low carbon private sector projects. The fund could potentially help avoid150 milliontons of carbon dioxide emissions. Critics expressed concern for the fund's involvement with industry and for aid money going to countries like India, which is already investing its own money into renewables. Earlier this month, the U.N. released a report on possible logistics for a "worldwide climate change" fund that could raise up to $100 billion a year to help developing countries cope with global warming, stating that funds could be raised through a combination of private investment and taxes on "carbon intensive goods." For the story on the UK's new fund, seehttp://www.guardian.co.uk/global-development/2010/nov/18/andrew-mitchell-renewable-energy-private-sector. For the story on the U.N. report, seehttp://www.telegraph.co.uk/earth/earthnews/8113401/World-leaders-look-to-carbon-taxes-to-fund-fight-against-climate-change.html.